How much of a problem is the threat of fraud to the UK economy?
Recent research has revealed that fines brought against firms for fraudulent activity since 2007 have surpassed the £1 billion mark, putting a heavy financial toll on the UK’s economy.
The National Fraud Authorities 2012 Annual Fraud indicator argues that fraud “harms all areas of the UK economy” and revealed that fraud losses totalled a staggering £73 billion last year and affected a number of sectors. The highest losses recorded were in the private sector (£45.5 billion), followed by the public sector (£20.3 billion), individuals (£6.1 billion) and the not-for-profit sector (£1.1 billion).
The introduction of the twin peaks model, replacing the Financial Services Authority (FSA) with the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), presents “an opportunity to reset conduct standards” according to Martin Wheatley, Chief Executive of the FCA.
With fraud becoming such a widespread problem, here are just some of the measures that businesses can take to prevent and address fraud:
Verify credentials
Verifying employee and supplier credentials by checking references, requiring employees to carry out a Criminal Records Bureau check if necessary and checking whether firms you are working with are registered at Companies House can help to reassure you that potential employees/suppliers don’t have a history of fraudulent activity.
Establish a code of conduct
Creating a code of conduct that all employees and suppliers must adhere to is also a measure that companies can take to safeguard against fraud. This should also include details of the measures that your company will take if this code is breached.
Seek professional support
Through forensic accounting services, an insolvency practitioner can help businesses to uncover fraud, and review all available evidence to identify the perpetrators of fraud before seeking prosecutions for fraudulent activity.